Legislation approved by the Ohio Senate that targets Internet sweepstakes cafes now moves to the Ohio House.

State senators this week moved to further clamp down on Internet sweepstakes cafes, passing legislation that would limit prizes the cafes could pay to their customers.

And unlike recently approved Internet cafe legislation that would effectively ban the cafes, this bill could not be challenged at the ballot.

The provisions approved this week define the sweepstakes operations so as to exclude gambling and would limit total prizes from all sweepstakes activities to 5 percent of the business’ annual gross receipts.

And the Senate attached an emergency clause to the bill, meaning it would become law the moment the governor signed it. Such bills are not subject to a referendum.

Critics of the Internet cafe industry, including Attorney General Mike DeWine, have targeted it as an unlawful front for illegal gambling and other serious crime, such as human trafficking and money laundering.

Proponents of the cafes have argued Internet cafes are legal and important to communities because they provide jobs.

Customers can obtain access to electronic sweepstakes gaming machines by purchasing cell phone minutes and computer time on the Internet. The electronic sweepstakes machines offer a chance at cash prizes.

DeWine, working with local law enforcement agencies, had pledged to crack down on the industry before the General Assembly passed legislation to effectively ban the cafes earlier this month.

DeWine supported that legislation, which Gov. John Kasich signed into law June 4. He also supports the legislative amendments approved this week, said his spokesman, Dan Tierney.

The same day that Kasich signed the earlier legislation, supporters of the Internet cafe industry pledged to mount a referendum drive to get the law repealed.

That referendum effort will continue, said Mark Weaver, a spokesman for the Committee to Protect Ohio Jobs, which recently got state approval to gather signatures in an attempt to get the issue on the ballot.

To be successful, it will have to collect more than 231,000 signatures from registered voters — an amount equal to 6 percent of the votes cast in the last gubernatorial election -- by early September.

“We’re still looking at all the options,” Weaver said. “We will support an option that gives Ohioans a right to vote on this issue.”

Weaver cited polling data that found a large majority of Ohioans oppose an outright ban on the internet sweepstakes cafes. They would prefer the state regulate them. The polling was conducted earlier this year by Fallon Research.

The legislation approved this week by the Senate differs from the law that prompted the referendum effort.

The earlier bill barred cash prizes from electronic terminals and limited the value of prizes to $10.

Because the new bill addresses different aspects of the sweepstakes cafe business, it could operate in tandem with the previously approved regulations. And the effort to repeal the previous regulation would not affect this legislation.

But the bill still has way to go before it could become law.

It was sent to the Ohio House after Wednesday’s vote. But the House did not take it up on Thursday as it was finishing work on the state’s two-year budget.

The House won’t reconvene until August or September, and even then the bill would be sent to a committee for hearings.

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